Prime Minister Kevin Rudd has today announced a major upgrade for Sydney's Westmead Hospital if he's re-elected next month.

He made the $122 million funding pledge at the hospital today.

Mr Rudd says $100 million will be spent on redeveloping buildings, which have not been upgraded since the hospital was built in 1978.

The remaining funding will go towards research, with $12 million to be set aside for a new facility at the Westmead Millennium Institute, which studies cancer, liver disease, respiratory disorders and other illnesses.

Another $10 million would be spent on enhancing the Westmead children's medical research institute.

Mr Rudd says the funding would create new jobs including 80 extra research positions at the Children's Medical Research Institute.

He says the upgrade is vital given Westmead is the main hospital for western Sydney, which has a population of 1.5 million people.

Federal Labor wants the New South Wales Government to match its funding commitment.

But the State Government has dismissed Mr Rudd's offer as "classic electioneering".

NSW Health Minister Jillian Skinner says she will not let Labor dictate the terms on the issue.

"This is a classic case of Labor chasing a headline three weeks out from an election," she said.

"Westmead is among the hospitals that is on our forward capital works plan and after September 7, I will be approaching the new federal government, whichever party wins, to discuss how we can work together to upgrade not only this hospital but others."

The Australian Medical Association welcomed Mr Rudd's $100 million pledge, but says it would not even cover a quarter of the cost to redevelop the hospital.